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E.J. Dionne Jr.
NationofChange / Op-Ed
Published: Thursday 29 September 2011
Buffett has outraged conservatives by saying that he pays taxes at a lower rate than his secretary.

Why Conservatives Hate Warren Buffett

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Maybe only a really, really rich guy can credibly make the case for why the wealthy should be asked to pay more in taxes. You can’t accuse a big capitalist of “class warfare.” That’s why the right wing despises Warren Buffett and is trying so hard to shut him up.

Militant conservatives are effective because they are absolutely shameless. Many of the same people who think the rich should be free to spend unlimited sums influencing our politics without having to disclose anything are now asking Buffett to make his tax returns public. I guess if you’re indifferent to consistency, you have a lot of freedom of action.

Buffett has outraged conservatives by saying that he pays taxes at a lower rate than his secretary. He’s said this for years, but he’s a target now because President Obama is using his comment to make the case for higher taxes on millionaires.

Thus did the Wall Street Journal editorial page call on Buffett to “let everyone else in on his secrets of tax avoidance by releasing his tax returns.”

Somehow, the Journal did not think to ask its friends who battle vigorously for low taxes on capital gains to release their tax returns, too. But aren’t they just as engaged in this argument as Buffett? Shouldn’t accountability go both ways? Nor did the Journal suggest that the Koch brothers could serve the public interest by releasing a full accounting of all their political spending.

Buffett’s sin is that he spoke a truth that conservatives want to keep covered up: Taxing capital gains at 15 percent means that people who make their money from investments pay taxes at a much lower marginal rate than those who earn more than $34,500 a year from their labor. That’s when the income tax rate goes up to 25 percent. (For joint filers, the 25 percent rate kicks in at $69,000.) For singles, the 28 percent bracket starts at $83,600, the 33 percent bracket at $174,400.

So if an investor such as Buffett pockets, say, $100 million of his income in capital gains, he pays only a 15 percent tax on all that money. For everyday working people, the 15 percent rate applies only to earnings between $8,500 and $34,500. After that, they’re paying a higher marginal rate than the multimillionaire pays on gains from investments. Oh, yes, and before Obama temporarily cut it by two points, the payroll tax added another 6.2 percent to the burden on middle-class workers. That levy doesn’t apply to capital gains or to income above $106,800, so it hits low- and middle-income workers much harder than it does the wealthy.

No wonder partisans of low taxes on wealthy investors hate Warren Buffett. He has forced a national conversation on (1) the bias of the tax system against labor; (2) the fact that, in comparison with middle- or upper-middle-class people, the really wealthy pay a remarkably low percentage of their income in taxes; and (3) the deeply regressive nature of the payroll tax.

(Because this column appears in The Post, I should note that Buffett heads a company that owns a substantial minority share in The Washington Post Co. and for many years held a seat on the company’s board of directors.)

It’s worth noticing that while conservatives who talk about religion get a lot of coverage — and I will always defend their freedom to speak of faith in the public square — what really get the juices flowing on the right these days are tax rates. I’m not sure that a politician who renounced the Almighty would get nearly the attention Buffett has received for his renunciation of low capital gains taxes.

Advocates of higher taxes on the wealthy do not want to “punish” the successful. Buffett and Doug Edwards, a millionaire who asked Obama at a recent town hall event in California to raise his taxes, are saying that none of us succeeds solely because of personal effort. We are all lucky to have been born in — or, for immigrants, admitted to — a country where the rule of law is strong, where property is safe, where a vast infrastructure has been built over generations, where our colleges and universities are the envy of the world, and where government protects our liberties.

Wealthy people, by definition, have done better within this system than other people have. They ought to be willing to join Buffett and Edwards in arguing that for this reason alone, it is common sense, not class jealousy, to ask the most fortunate to pay taxes at higher tax rates than other people do. It is for this heresy that Buffett is being harassed.

© , Washington Post Writers Group


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ABOUT E.J. Dionne Jr.

E.J. Dionne writes about politics in a twice-weekly column and on the PostPartisan blog. He is also a senior fellow in Governance Studies at the Brookings Institution, a government professor at Georgetown University and a frequent commentator on politics for National Public Radio, ABC’s “This Week” and NBC’s “Meet the Press.” Before joining The Post in 1990 as a political reporter, Dionne spent 14 years at the New York Times, where he covered politics and reported from Albany, Washington, Paris, Rome and Beirut. He is the author of four books: “Souled Out: Reclaiming Faith & Politics After the Religious Right” (2008), “Stand Up Fight Back: Republican Toughs, Democratic Wimps, and the Politics of Revenge” (2004), “They Only Look Dead: Why Progressives Will Dominate The Next Political Era” (1996), and “Why Americans Hate Politics” (1991), which won the Los Angeles Times Book Prize and was a National Book Award nominee. Dionne grew up in Fall River, Mass., attended Harvard College and was a Rhodes Scholar at Balliol College, Oxford. He lives in Bethesda, Md., with his wife and three children.

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14 comments on "Why Conservatives Hate Warren Buffett"

Chris Thompson

September 30, 2011 11:11am

"Conservatives" don't hate Warren Buffet. What sort of jerk off wrote that headline? Hey may be real a real rich prick, tax evader and deceptive at times but that's what works for him.

If they want to increase taxes on Buffet fine by me. Do an alt min tax modification. But don't try to screw me over just because some billionaire a-hole is on easy street.

Shut up stupid

evdebs

September 30, 2011 11:07am

Who's talking about raising taxes on families earning 250k? Absolutely nobody!

The conservatives claim that people that make 250k are not rich and should not be subject to the highest tax rate. I agree. My question is just how much earned income do you need in order to show more than 250k on line 43 of the 1040? I do believe that that number is much closer to 400k and that should be the point of reference in the discussion.

Remember, only that portion of net taxable earned income over 250k would be subject to the higher tax bracket. So no one, not even the most liberal Democrats, want to raise taxes on any family that earns 250k after paying their state and local taxes, mortgage interest, medical expenses, contributions to charities, retirement funds, college funds, medical funds, .... Also keep in mind that any additional income from dividends, interest, and any profit from the sale of assets are taxed at a maximum of 15%.

“The subjects of every state ought to contribute toward the support of the government in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state." Adam Smith. Wealth of Nations 1776

evdebs

September 30, 2011 6:57am

Best formula for growth in our nation's history was to super-tax the super-rich.

Republicans like George Will smugly state that even when the US taxed the super rich in the past at 70% and 90% in the highest brackets, no one actually paid those rates. But they fail to mention just how they managed to overcome that liability. The very wealthy did successfully and legally avoid those taxes. Rather than pay those confiscatory rates on their excess income, they opted instead to grow their businesses.

They devoted more funds to research and development, built new plants, updated old ones and hired new employees. They invested in insurance, profit sharing and pension plans for the mutual benefit of themselves and their employees. They did all of this to the benefit of our entire society primarily to avoid that higher tax bracket while continuing to build their individual wealth. .

The prevailing arguments for tax relief for the super rich, those alleged “job creators”, are exactly wrong. If you want to expand the economy you first need to tax the high end of those multi-million dollar incomes at a substantially higher rate to give them the incentive to invest that excess capital back into the economy rather than hoard it or worse, earmark it to some hedge fund manager to manipulate the markets to the extreme detriment of all but a very few of us.

Chris Thompson

September 30, 2011 3:41pm

Actually they wasted a shit load of money on unproductive crap. When unleashed into efficient markets then money went to work producing stuff and jobs along with it.

Sandra Streifel

October 03, 2011 9:54am

Your statement is meaningless. Perhaps you meant to say they purchased goods and services for their buisinesses.

Donna M Crane

September 29, 2011 10:24pm

Thank you for your public service, Mr. Buffett. You and I remember an age when we were proud to help our country in times of need. Thank you for not standing on the sidelines with your foot on the neck of your suffering countrymen.

oldhat

September 29, 2011 4:02pm

buffet suggest raising tax rates however this will not affect him [chelsea law] , gates[donations to captive charity], or soro [treaty]

ARTH

September 29, 2011 3:59pm

As Elizabeth Warren has already said so articulately and so explicitly, no one achieved his financial success in this country solely by means of his or her own initiative. There are courts, police, roads, power grids, and people educated by the public schools involved. Therefore, they should be obliged pay tribute to the country, the people, and yes, the government which made it possible for them to achieved their extraordinary and out-of-proportional prosperity.

John Lorenz

September 29, 2011 1:42pm

That's right: Mr Buffett exposes the absolute ridiculousness of the right wing position that the rich should reap huge rewards from society and not shoulder their fair share of taxes. Mr. Buffett is right: our government and elite coddle the overprivileged at the expense of average people whose backs are against the wall. There is no reason for it other than selfishness and greed among the conservative rich, who feel 'entitled' to all the tax breaks, perks and subsidies they get, while calling people who work hard at minimal wage jobs 'bums' simply because they are poor. The right shows its contempt for decent hard working people and its worship of people who game the system to extract every last penny out of a country that has helped them get where they are through favorable legislation.

Norman Allen

September 29, 2011 12:32pm

Conservatives hate Buffett and his ilk because they have a heart and are not mindless hoarders of wealth for no reason. Success is not accumulation of wealth beyond one's lifetime need. Such success is mental illness when everyone around one is drowning because Mr." Successful" is in a position to manipulate forces to keep him "successful" and others keep drowning. What happened to humanity along the way to "success"? May the FORCE increase Buffett's kind.

Zachary Guadamour

September 29, 2011 12:17pm

The last two paragraphs say it all:

Advocates of higher taxes on the wealthy do not want to “punish” the successful. Buffett and Doug Edwards, a millionaire who asked Obama at a recent town hall event in California to raise his taxes, are saying that none of us succeeds solely because of personal effort. We are all lucky to have been born in — or, for immigrants, admitted to — a country where the rule of law is strong, where property is safe, where a vast infrastructure has been built over generations, where our colleges and universities are the envy of the world, and where government protects our liberties.

Wealthy people, by definition, have done better within this system than other people have. They ought to be willing to join Buffett and Edwards in arguing that for this reason alone, it is common sense, not class jealousy, to ask the most fortunate to pay taxes at higher tax rates than other people do. It is for this heresy that Buffett is being harassed.

Diane Ribbentrop

September 29, 2011 12:06pm

Lets have a level fair playing field Thats all we ask

Diane Ribbentrop

September 29, 2011 12:04pm

Bravo Mr Buffett You must be doing something right if Robber barons /
.Baggers hate you Fight on Warren !